China sovereign fund CIC profit soars

SHANGHAI: China’s sovereign wealth fund China Investment Corp (CIC) posted a 37.55% rise in 2017 net profit, boosted by record-high returns from its overseas portfolio.

Profit rose to US$103.62bil from US$75.34bil a year ago for CIC, a shareholder in China’s largest banks such as China Development Bank Corp as well as Industrial and Commercial Bank of China Ltd.

CIC’s total investment income was US$114.46bil, versus US$83.03bil in 2016, its 2017 report showed yesterday.

It reported a 17.59% net return on its overseas investments, an all-time high, versus 6.22% in 2016.

CIC invests overseas through two units, CIC International Co and direct investment vehicle CIC Capital Corp.

The latter, in 2017, made 20 overseas investment decisions with a total committed investment figure of US$3.8bil.

The wealth fund hopes to invest more in US markets, CIC president Tu Guangshao said at a press conference in Beijing, adding that concerns about any impact on the fund’s investment plans from mounting trade tensions between the countries was “totally unnecessary”.

Offshore strength pushed the fund’s annualised accumulative investment return for the 2007 to 2017 period to 5.94%, exceeding the fund’s performance review target, CIC said. Headquartered in Beijing, CIC was founded in 2007 to help China earn a higher return on its foreign exchange reserves.

In the past, CIC has invested in several overseas companies ranging from online property rental firm Airbnb, Canadian mining company Teck Resources to US private equity house Blackstone.

CIC, however, sold its equity holding in Blackstone in March, exiting from an 11-year old investment. — Reuters